California’s Fiscal Fortunes Go From Catastrophe to Windfall

Tax payments from wealthy Californians have changed the state’s short-term financial outlook from a pandemic-induced catastrophe to windfall, the state’s Legislative Analyst said.

Collections of personal income, corporate, and sales tax so far in the current fiscal year are $11 billion higher than projected, the analyst’s office said. Lawmakers had expected those tax collections to drop by 15 percentage points when they enacted the budget in June.

• The stronger-than-expected revenue creates an estimated windfall of $26 billion for the fiscal year that begins July 1, 2021 that should be spent on restoring recent spending cuts and saving ...